Content and data provided by various third parties and Fidelity − Terms of Use | Help/Glossary
Research > ETFs > ETF / ETP Commentary > 

Tired of Tax Day? Municipal Bond Ladders Could Help

BY | ETF Database
12:31 pm ET 05/21/26 | 1 VIEW
With Tax Day 2026 now in the rear view mirror, some investors may feel more inspired to optimize their portfolio in terms of tax efficiency. When it comes to maximizing tax-efficient total return, many turn to municipal bonds as a potential solution. This often makes a great deal of sense, given that the interest that municipal bonds tend to accrue is generally exempt from federal income tax. As such, high-quality municipal bonds can help bolster a portfolio with strong tax-advantaged yields.Normally, when one is choosing to add muni bonds to their portfolio, they need to make a tough decision in terms of bond duration. Should they opt for short-duration munis, or is it time to play the long game? Instead, it could be more fortuitous to get the best of both worlds, with a bond ladder ETF. Bond ladder ETFs invest in bonds of all kinds, and traditionally ladder their portfolio based on maturity.Building Long-Term Muni Exposure With MUNDThe Northern Trust 2055 Tax-Exempt Distributing Ladder ETF (MUND ) offers a promising take on the bond ladder approach. As one would likely expect from the fund’s title, MUND curates a laddered portfolio of municipal bonds that aims to generate regular tax-exempt income. For MUND, each of the rungs of its ladder represents a calendar year through 2055. Inside these rungs sit municipal securities that hit maturity in that respective year. The fund looks to allocate towards each rung in a relatively even manner, aiming to provide a more consistent income flow. Additionally, MUND offers its investors the benefits of annual principal. When an underlying municipal bond hits maturity, most bond ladders would reinvest that principal into a later rung in the ladder. Instead, MUND distributes that principal on an annual basis, offering more avenues for tax-advantaged gains. This approach encapsulates how MUND may help investors amplify the tax-efficiency within their portfolio. Within one ticker, investors get to tap into the potential for regular income, annual principal, and exposure to a variety of different municipal bond durations. And for those looking to minimize the impact Tax Day has on their bottom line, picking up a strategy like MUND could certainly pay off in the long run. For more news, information, and analysis, visit the Bond Ladders Content Hub.Disclosures:ETF investing involves risk, and principal loss is possible.  Shares of any ETF are bought and sold at market price (not NAV). They are not individually redeemed from the ETF. Brokerage commissions will reduce returns.  The net asset value of the Northern Trust ETFs will decline over time as income is distributed to shareholders.  Individual bonds carry an obligation to return principal to investors at maturity fully, however ETFs have no such obligation. Before investing, carefully consider the investment objectives, risks, charges, and expenses. This and other information is in the prospectus and a summary prospectus, copies of which may be obtained by visiting www.flexshares.com. Read the prospectus carefully before you invest. Northern Funds Distributors, LLC, distributor. Northern Funds Distributors, LLC and FlexShares are not affiliated with Northern Trust. All investments are subject to investment risk, including the possible loss of principal amount invested. Investments do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns. Not FDIC insured | May lose value | No bank guarantee

More Commentary

Drone Economy Comes Alive in This New ETF
BY | ETF Database
11:51 am ET 05/21/26 | 16 VIEWS
TVAL: Finding the Overlooked Value in Large-Caps
BY | ETF Database
7:01 am ET 05/21/26 | 19 VIEWS
Washington’s $2 Billion Quantum Bet Can Prop Up These ETFs
BY | ETF Database
11:01 am ET 05/21/26 | 22 VIEWS
View more Commentary

Search Commentary

Enter Keyword(s)
Filter Results

Performance data shown is past performance and is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. Yield and return will vary, therefore you have a gain or loss when you sell your shares. For standard quarterly performance, go to the fund's Snapshot page by clicking on the ETF/ETP's symbol.

ETFs may trade at a premium or discount to their NAV and are subject to the market fluctuations of their underlying investments.

For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain FBS platforms and investment programs. Please note, this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral. Additional information about the sources, amounts, and terms of compensation can be found in the ETF's prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice. BlackRock and iShares are registered trademarks of BlackRock, Inc. and its affiliates.

FBS receives compensation from the fund's advisor or its affiliates in connection with a marketing program that includes the promotion of this security and other ETFs to customers ("Marketing Program"). The Marketing Program creates incentives for FBS to encourage the purchase of certain ETFs. Additional information about the sources, amounts, and terms of compensation is in the ETF's prospectus and related documents. Please note that this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral.

News, commentary (including "Related Symbols") and events are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.

Any data, charts and other information provided on this page are intended to help self-directed investors evaluate exchange traded products (ETPs), including, but limited to exchange traded funds (ETFs) and exchange traded notes (ETNs). Criteria and inputs entered, including the choice to make ETP comparisons, are at the sole discretion of the user and are solely for the convenience of the user. Analyst opinions, ratings and reports are provided by third-parties unaffiliated with Fidelity. All information supplied or obtained from this page is for informational purposes only and should not be considered investment advice or guidance, an offer of or a solicitation of an offer to buy or sell a particular security, or a recommendation or endorsement by Fidelity of any security or investment strategy. Fidelity does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating ETPs. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use. Determine which securities are right for you based on your investment objectives, risk tolerance, financial situation and other individual factors and re-evaluate them on a periodic basis.

Before investing in any exchange traded product, you should consider its investment objective, risks, charges and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.

Down Homepage
customer service
Customer
Service
trade
Trade

Contact us:

chat Chat with a
representative
building Find an Investor
Center

Reference Number:

950994.2.0

call Page Pixel